This matter is before the Authority on exceptions to an award of
Arbitrator Neil N. Bernstein filed by the Agency under section 7122(a) of the
Federal Service Labor-Management Relations Statute (the Statute) and part 2425
of the Authority's Regulations. The Union filed an opposition to the Agency's
exceptions.

The Arbitrator ruled that the grievant's suspension was not for just
cause, as required by the parties' collective bargaining agreement, and ordered
that the suspension be vacated.

We conclude that the Agency has failed to establish that the award is
deficient under section 7122(a) of the Statute. Accordingly, we deny the
Agency's exceptions.

II. Arbitrator's Award

The grievant audits defense contracts. The instant grievance arose when
one of the grievant's colleagues, who worked in a cubicle next to the grievant,
advised the Agency that she believed the grievant had been making telephonic
threats against his supervisor. Specifically, the employee stated that she had
overheard the grievant making certain derogatory remarks and although the
employee did not know who the remarks were directed against, she believed that
the grievant's supervisor and the Agency's Resident Auditor were the subjects
of the remarks. Subsequently, the grievant denied making any of the statements
attributed to him.

The Resident Auditor proposed that the grievant receive a 10-day
suspension for engaging in disorderly conduct.(1) The grievant, in turn, protested this action to the Regional
Manager, who reduced the suspension to 5 days. Award at 5. Thereafter, a
grievance was filed which was ultimately submitted to arbitration on the
following issue, as stated by the Arbitrator:

Did the [Agency] compl[y] with the provisions of Article 24 of its
collective bargaining agreement with the Union when it issued a five day
suspension to the [g]rievant[.]

Id. at 2.

The Arbitrator found that the suspension was not for just cause, as
required by the parties' collective bargaining agreement.(2) The Arbitrator determined, in this
regard, that most of the statements attributed to the grievant were innocuous
and would not support a suspension. He further determined that the grievant had
"a perfect right, in the privacy of his own work area," to curse and complain.
Id. at 7. The Arbitrator noted that: the employee who overheard the
statements did so through a partition that was designed to provide privacy; the
employee only heard the grievant's side of the phone conversations; and, at no
time did the employee actually hear the grievant refer to his supervisor in
connection with the statements. As the grievant adamantly denied having
participated in such conversations, and as there was no evidence to corroborate
the employee's assumptions, the Arbitrator concluded that "the chances [were]
just too great" that the employee "misunderstood" what she had heard.
Id. at 8.

The Arbitrator stated that, even assuming that the grievant made the
derogatory remarks attributed to him, and that the remarks referred to his
supervisors, the remarks did not constitute threats. The Arbitrator also stated
that "the Resident Auditor clearly would have acted within his authority if he
had called the [g]rievant into his office and cautioned him that his telephone
comments could be overheard . . . ." Id. at 9. In the Arbitrator's
view, a warning was the most severe sanction that could be imposed for the
grievant's remarks. Accordingly, the Arbitrator sustained the grievance and
ordered that the suspension be expunged from the grievant's records and that
the grievant be made whole for his lost wages and benefits.

III. Exceptions

A. Agency's Exceptions

The Agency maintains that the award is deficient on three grounds.
First, the Agency contends that the award fails to draw its essence from
Article 24, section 1.B of the parties' bargaining agreement because the
Arbitrator concluded that the statements attributed to the grievant did not
justify the imposition of discipline. The Agency argues, in this regard, that
the grievant was disciplined for engaging in disorderly conduct, not for making
threats, and that the Arbitrator's award "draws essence" from his erroneous
conclusion that it was necessary to find a threat to sustain discipline.
Exceptions at 2.

Second, the Agency claims that the Arbitrator exceeded his authority by
arbitrating the issue in this case "on the assumed charge of making a threat"
and erroneously substituting his judgment concerning the appropriate penalty
for that of the Agency. Id. Specifically, the Agency challenges the
Arbitrator's statement that a warning was the most severe sanction that could
be imposed for the grievant's remarks.

Finally, the Agency maintains that the award fails to conform to law,
rule, or regulation because the Statute permits it to discipline employees in
accordance with the Agency's tables of penalties.

B. Union's Opposition

The Union claims that the Agency's exceptions merely express
disagreement with the Arbitrator's award and, as such, should be denied.

IV. Analysis and Conclusions

A. The Award Draws Its Essence From the Agreement

To demonstrate that an award fails to draw its essence from the
collective bargaining agreement, the party making the allegation must show that
the award: (1) is so unfounded in reason and fact, and so unconnected with the
wording and purposes of the collective bargaining agreement, as to manifest an
infidelity to the obligation of the arbitrator; or (2) does not represent a
plausible interpretation of the agreement; or (3) cannot in any rational way be
derived from the agreement; or (4) evidences a manifest disregard of the
agreement. E.g., United States Department of Labor (OSHA) and
National Council of Field Labor Locals, 34 FLRA 573, 575-77 (1990).

The Agency has not demonstrated that the award is deficient under any
of these tests. Nothing in the Arbitrator's interpretation and application of
Article 24, section 1.B of the parties' agreement is irrational, unfounded,
implausible, or in manifest disregard of the agreement. See,
e.g., U.S. Department of Veterans Affairs, Medical Center,
Birmingham, Alabama and American Federation of Government Employees, Local
2207, 51 FLRA 270, 275 (1995) (VA, Birmingham). Accordingly, the
Agency has failed to establish that the award fails to draw its essence from
the parties' agreement.

B. The Arbitrator Did Not Exceed His Authority

An arbitrator exceeds his or her authority when the arbitrator fails to
resolve an issue submitted to arbitration, disregards specific limitations on
his or her authority, or awards relief to persons who are not encompassed
within the grievance. SeeU.S. Department of the Navy, Naval Base,
Norfolk, Virginia and American Federation of Government Employees, Local
22, 51 FLRA 305, 307-8 (1995).

It is well established that in the absence of a stipulated issue, an
arbitrator's formulation of the issues is accorded substantial deference.
SeeAmerican Federation of Government Employees, Local 916 and
Defense Distribution Depot, Oklahoma City, Oklahoma, 50 FLRA 244, 246-47
(1995). An arbitrator is granted the same broad discretion to fashion
appropriate remedies for contract violations. Id. at 247. In this case,
it is not argued or apparent that the parties stipulated the issue to be
resolved, and the award, including the remedy, is directly responsive to the
issue as formulated by the Arbitrator.

In addition, the Arbitrator formulated the issue in this case in terms
of the Agency's compliance with Article 24--the just cause provision--of the
parties' agreement. As the Arbitrator ultimately concluded that the grievant's
suspension was not for just cause, the Agency's exception to the Arbitrator's
statement regarding the type of discipline it could have appropriately imposed
does not provide a basis for finding the award deficient. See,
e.g., American Federation of Government Employees, Local 1923 and
U.S. Department of Health and Human Services, Health Care Finance
Administration, Baltimore, Maryland, 51 FLRA 576, 578 (1995) (comments or
dicta are statements separate from the award and exceptions thereto provide no
basis for finding an award deficient). Accordingly, the Agency has failed to
establish that the Arbitrator exceeded his authority.

C. The Award Is Not Contrary to Law, Rule or Regulation

The Agency claims that the award fails to conform to law, rule, or
regulation because the Statute permits it to discipline employees in accordance
with its established table of penalties. The Agency has not identified any
particular section of the Statute which has been violated, and has failed to
provide any argument in support of this contention. Consequently, the Agency
has failed to demonstrate that the award is deficient on this basis. Seegenerally, American Federation of Government Employees,
Local 1802 and Social Security Administration, Golden Teleservice Center,
Golden, Colorado, 50 FLRA 396 (1995). Moreover, even assuming that the
Agency has raised a claim that the award conflicts with its right to discipline
under section 7106(a)(2)(A) of the Statute, the Authority held in VA,
Birmingham, 51 FLRA at 273, that an award "enforcing a contractual
provision requiring just cause for discipline . . . is not deficient as
inconsistent with section 7106(a)(2)(A)." The award in this case enforced
Article 24, section 1.B of the parties' agreement, which requires just cause
for discipline. Accordingly, for reasons stated fully in VA, Birmingham,
the Agency's exception does not provide a basis on which to find the award
deficient.